Employers need to be aware of and insure to update policies and contracts because of two developments in sexual harassment law. First, as of September 1, 2021, Texas law expands the definition of an employer for sexual harassment in Texas, extends the statute of limitations to report a claim, and establishes a new standard for Texas employers’ response to sexual harassment claims. Second, a new federal law prohibits employers from enforcing arbitration clauses and confidentiality for sexual harassment claims.

Texas’ New Sexual Harassment Law:

An Employer of one person is covered, now. Prior to the passage of the new Texas sexual harassment law, an employer in Texas was only subject to claims for sexual harassment if the employer employed fifteen employees and was thus bound by Title VII. The new law changes the employee threshold to one employee. In addition–supervisors and coworkers beware–the law also includes in the definition of employer those who “act directly in the interests of an employer.” Without passage of the law, sexual harassment was only actionable against the individual sexual harasser for possible assault, battery, or intentional infliction of emotional distress. And, the employer with under 15 employees may have been able to escape liability whatsoever unless it could be held accountable as part of a conspiracy or for some tort such as negligent retention related to the acts of the perpetrator. Now, claims for sexual harassment against the employer and individuals employed by the employer may be liable for sexual harassment as defined by the Act.

The deadline for making claims is extended. Prior to the new law, the deadline for filing a claim with the Texas Workforce Commission (“TWC”) was 180 days. It is now 300 days for claims initiated after 9/1/2021, making the deadline coexistent with the timeline under federal law.

Heighten Standard Established: Prior to the new law, the Texas standard for employers to respond to sexual harassment claims was the same as the federal standard. An employer taking “prompt remedial action” in response to alleged sexual harassment had an affirmative defense to the claims. The new Texas law standard is that an employer must take “immediate and appropriate corrective action” when the employer or its agents or supervisors “know or should have known that the conduct” was occurring. Just how much more demanding “immediate and appropriate” will be compared to “prompt remedial action” will need to be borne out by the courts.

So, what do you need to do?

Whether you have thousands of employees or one, update your employee handbook and grievance process now.

Determine whether your pre and post investigation procedures have plans in place to potentially take immediate action and determine what that would look like.

Consult with legal counsel.

Federal Ban on Arbitration and Class Action Waiveres for Sexual Harassment Claims:

On March 3, President Biden signed H.R. 4445 entitled “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.” The Bill amends the Federal Arbitration Act (FAA) to invalidate predispute agreements requiring claimants to arbitrate claims of sexual assault and sexual harassment and prohibiting claimants from engaging in a class or collective action. Clauses that make the choice to arbitrate dependent on the claimant’s consent will still be enforceable. The prohibition extends to sexual assault or sexual harassment claims only, and not other causes of action which may be subject to arbitration or class/collective action waiver. It is also unclear whether arbitration and class action waivers without an exception may be subject to arguments by adversaries that the lack of exception invalidates the provision as to all claims.

So, what do you need to do?

Review and revise your arbitration and class action waiver provisions with advice of legal counsel.